On highway 49, 1.4 miles south of Mokelumne Hill.
From Discover Historical California:
In 1849, Chili Gulch was among the richest placer mining areas in Calaveras County. The Chileans use of peon labor to work their claims upset the anti-slavery miners and resulted in laws being passed banning the use of slave, or peon, labor. Chileans fought the Americans over this issue and lost the "Chilean War".
From the official site plaque:
Chili Gulch: State registered landmark No. 265.
Richest placer mining section, extending five miles, in Calaveras county. Received name from Chileans who worked gulch in 1848 and 1849, and scene of the so-called Chilean War. Largest known quartz crystals recovered from mine on south side of gulch.
Marker placed by California Centennials Commisssion. Base furnished by McKelumne Lions Club. Dedicated July 4, 1949.