In 1878, an important discovery was made in the area. A gold nugget was found in the Karatara River, near Ruigtevlei. Soon fortune hunters from all over the world arrived at the Millwood Forest in search of gold, and Millwood grew into a bustling town. Millwood was declared a gold field, the very first in South Africa. However, soon not enough gold was being recovered to sustain a growing town, and the mining industry in the area collapsed. Some miners relocated to Knysna, bringing their little homes with them. One of the houses, known as ‘Millwood House’, now functions as a museum.