When miners were trying to reach the ancient, buried river channels that held rich deposits, they often dug shafts. Some of these shafts were sloping or even horizontal tunnels that bored several hundred feet into the hillsides. The miners would often be out of sight and if there was a ruckus or disturbance outside their shaft, the miners would pop out of their holes just like coyotes. The holes themselves became known as coyote holes and the mining technique as coyote mining.
For deep deposits men would often work as a team, joining forces, in search of gold bearing soil just above the bedrock. One man would go down in the hole to dig and gather dirt while the other miners would wait at the top and hoist the dirt out of the coyote hole. The gravel, dirt and gold hauled up by windlass, were then carried to a nearby river or stream to pan and separate the gold. This method of mining required a great amount of labor, was very slow and not very profitable. Imagine the task when you’re down there. You only have room for a small pick to break through the hard-packed dirt, clay and rocks. Working inside these holes was the most dangerous type of gold mining, with frequent cave-ins. The risk was high but the rewards of striking it rich is what drove the miners to digging these holes.