One possible explanation for the story is that placer miners found gold bearing gravels beneath an ancient lava flow at the base of Ruby Mountain, and were actively tunneling under the old lava flow to mine the gravels. As its name suggests, Ruby Mountain is ruby-colored due to the scoriaceous tephra that covers much of its summit. So, with miners working by the light of the summer sun shining off of the ruby-red flanks of the volcano, it's easy to see how such a rumor would have started. There have been no evidence of the eruption found in the region and the 19th century report is considered uncertain.