Gabriel Read had found considerable amounts of alluvial gold while prospecting. He believed there was enough gold in the area for it to be a payable field. He had visited the area following earlier discoveries by 'Black Peter' (Edward Peters), a Hindu who was employed as a casual labourer on a nearby farm.
As the easily mined alluvial gold was exhausted prospectors moved on to find new deposits of gold. Large capital was needed to search for further gold requiring large amounts of water and the building of water races, hydraulic pumps for washing the spoil and later stamper batteries for crushing the hard quartz and freeing the gold.
At the same time hardworking Chinese immigrants came to the goldfields. They were shunned by the European miners and in the 1880's the authorities introduced a poll tax and an annual residence tax that Chinese immigrants had to pay. Never the less they arrived in large numbers and many of them lived in their own settlement at Evans Flat, just north of Lawrence. They reworked the areas the European miners had already worked and the more remote and harder areas.
Gabriels Gully is the most famous of the several goldfields discovered in the area. Others included Munroes Gully, Adams Flat, Weatherstons, Bungtown, Waitahuna Gully, and Waipori.
Gabriels Gully is part of the Otago Goldfields Trail that is supported by the Otago Goldfield Heritage Trust and includes goldfields throughout Otago.