Rich silver and lead ore deposits were discovered in this area in 1883 by the Prentice brothers. John Moffat's Montalbion Mining and Smelting company was built and in full operation by 1885. By 1887 Moffat had sold his interest to a British company, which operated Montalbion smelters until the collapse of the world metal prices and the bank crash of 1893. Moffat again became involved with the Montalbion smelters and worked the new company successfully. Due to the lack of ore supplies the smelters closed and were moved to Mt Garnet in 1900.

Montalbion was the commercial centre of the area before Irvinebank. The town was the seat of local government; it had a hospital, police station, courthouse, mining and share brokers, School of arts, seven hotels, shops of all descriptions and the Montalbion State School, which closed in 1906.

That same year the last Head Master of Montalbion State School, Mr. Peter O'Reilly wrote to the Education Department requesting instructions. "19-3-1906. Subject: - Attendance. I beg most respectfully to inform you that all the children who attended this school have now left. The place is absolutely deserted - the last family having gone to live in Irvinebank. Awaiting your instructions I am, Sir, Your Obedient Servant, P.O'Reilly.

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