Alluvial gold was discovered in the Tarnagulla (Sandy Creek) area in 1852. Soon after, gold bearing quartz reefs were recognised and underground mining gathered pace in the mid-1850s.

Production records for the Tarnagulla Goldfield (including the Llanelly and Waanyarra fields) are incomplete but it is estimated at 561,000 oz of quartz reef gold, with around 700,000 oz of total alluvial and reef production.  The Poverty reef dominated the field for high grade and gold yield.

From 1853-1866, 360,000 oz (11,197 kg) of gold were mined from the Bonanza Shoot of 122,000 tonnes (an average head grade of 92 g/t), at the north end of the Poverty reef.