The gossan became the primary source of mined ore in 1845. The ore was roasted to drive off sulfur dioxide. Smith sold the operation to David Pingree who organized the Katahdin Iron Works. When pig iron sold slowly, Pingree built a puddling refinery to produce wrought iron. The Boston market for wrought iron remained poor, and the iron works ceased operation from 1857 until the American Civil War increased iron demand in 1863. When Pingree died, a group of Bangor, Maine businessmen formed the Piscataquis Iron Works Company to take over the operation in 1876. They refurbished the boarding house as the "Silver Lake Hotel" for the tourist trade; and hired a Swedish mining engineer in 1877 to improve the iron by reducing the silicon content. The 19-mile (31-km) Bangor and Katahdin Iron Works Railway was built in 1881 to connect the town with what would become the Bangor and Aroostook Railroad at Milo, Maine.