In July-September 1863 a devastating combination of flood, snowstorm, and blizzard caused heavy loss of life among the mining population of Central Otago. In July 1863 a long and sustained fall of snow in the ranges produced grim living conditions in the area between Strath Taieri through the Maniototo County and its high country right up to the lakes. Then, without warning, warm and completely unseasonable rains precipitated a swift and continuing thaw. In a matter of days all the gold rivers—the Clutha (Molyneux), the Kawarau, the Shotover, the Arrow, the Manuherikia, the Bannockburn—and a score of fast-flowing mountain streams were in violent flood. The Clutha rose 20ft in a night; the Shotover was soon 35 ft above normal; and the Arrow, usually a slow-moving stream, engulfed Arrowtown. Tented miners on the river banks were caught unawares, and even on the terraces above the normal water level many escaped only with difficulty. Men watched helplessly while others were swept down the flood waters. On one Shotover beach eight tents, together with their occupants, disappeared. Many escaped with the loss of all they possessed, but others were less fortunate. Scattered communities from Queenstown to the Manuherikia suffered heavily. When the rivers subsided there was no reliable means of knowing how many lives had been lost, but thousands of miners had to start afresh without gear or goods.

Worse was to follow when snowstorms began early in August. Blizzards swept inland Otago from Outram on the Taieri Plains to the settlements at Lakes Wakatipu and Wanaka. It snowed almost daily throughout the whole of August 1863. Roads not only became impassable—they were impossible to find. In September, when the weather showed little signs of improving, the situation was critical everywhere. Snow continued throughout spring and into summer, and conditions did not return to normal until Christmas. Mining settlements and camps over an area of more than 800 square miles were isolated or engulfed by the snow, and each of the ranges had its quota of miners. But the Rock and Pillar, the Lammerlaws, the Raggedy, Rough Ridge, the Old Man, the Dunstan, and Hawkdun Ranges carried such a covering of snow that access was almost impossible. Late in September a police party was caught in the Kakanuis near Naseby. Frostbitten and in dire straits, most of its members reached safety but Sergeant Garvie, of Ranfurly, an old identity on the goldfields, lost his life. Late in October, when efforts were still being made to reach miners marooned at Campbell's Diggings—one of the new rush gullies, across the 6,000 ft Old Man Range—several bodies found on the frozen windswept tops were buried where they lay. Many stories could be told of individual courage and self-sacrifice in the rescue operations that continued unceasingly.

As well as the miners, runholders suffered heavily, experiencing severe hardships from isolation, exposure, and lack of food. Stock losses were heavy everywhere. The number of miners' bodies recovered was fewer than 20, but the numbers missing left the certainty of terrible tragedy. It was impossible to assess the total toll in lives, but the Otago Witness, in August and September 1863, counted over 100 fatalities in the floods and in the snowstorms that followed. Contemporary unofficial estimates give figures varying between 100 and 200, but the Warden's Court records place the ascertained deaths at 37. At the time, and in view of the constant movement among the mining population, it is certain that the fate of many was never determined.

In 1928, to mark the catastrophe, the Government erected a stone monument, between Teviot and Manuherikia—at Gorge Creek—in what today is a deserted gully. In 1863, however, it was known to the miners as Chamounix Creek, a bustling canvas town with stores, hotels, and grog shanties. At the time of the storms it was the centre of great mining activity. Several graves may still be seen in the gully and, on the bleak summit of the Old Man Range, there are cairns that mark the resting places of miners and rescuers alike.