Here's what happened.
The diggings were in Bear Creek below Pinos Altos, NM. The Spanish had been sporadically trying to exploit Bear Creek from at least the early 1800s, or maybe earlier, as they had already occupied Santa Rita del Cobre, only ten miles away to the east. However, the Chihene Apaches constantly harassed the Spanish at Santa Rita, where they had a fort, and especially at unprotected Pinos Altos, which was very favored ground and a stronghold for the natives.
Jacob Snively was the "Dutchman" in several of the LAD legends. A Confederate operative, he and two pals located the Bear Creek placers in 1860, touching off a big rush into the area - 700 miners by the end of the year. The diggings were rich, but the Apaches drove the Anglos out of the territory by late 1861. The camp was abandoned until 1867, when the Apache trouble ended and mining resumed again.
During the abandonment, the Chihene leader Mangas Coloradas was assassinated in early 1863 and Fort West was soon thereafter established on the Gila River near the mouth of Bear Creek. In late 1863 the Stevens Expedition was organized in Arizona to exploit the known Bear Creek placers, with Snively being the key member since he knew exactly where the richest placer pockets were - after all, he was their discoverer in 1860.
Was the character known as Adams in the mining party? Hard to say for certain, but quite possibly. If not, he certainly knew the history, as did many in the Southwest at that time.
The mining party arrived at Bear Creek and went to work. A lot of gold was recovered. It's reported that Snively had about 40 pounds of placer with him when he left early to return to Arizona, as he sensed more Apache trouble brewing. He was correct, because the Chihene soon thereafter massacred all but a couple of the miners to avenge Mangas's recent murder and to attempt to keep Anglos out of the Pinos Altos area.
Pinos Altos and the Bear Creek placers resumed mining four years later in 1867 and produced millions of $. The placers mostly played out by the early 1900s, even though the creek was sporadically active until about 1980.
The reason the LAD remains such a mystery for the curious is the number of conflicting stories about the diggings - most of them hybrids from alleged testimony from some guy named Adams who allegedly was there.
The solution seems quite obvious - the diggings were never lost.
