Until the mid 1860's, the inner part of Salvage Bay remained unsettled. It's open harbour and relative distance from proven fishing grounds, resulted in the area being overlooked in favor of more suitable sites. Salvage, which had been settled for 200 years, and boasted a considerable population, had exhausted most of the little available land and it was inevitable that the large, level tracts at the 'bottom' of the bay would become more attractive. Barrow Harbour, with a history similar to that of Salvage, had already begun their migration along the southern side of the Peninsula to Sandy Cive and Happy Adventure.
In the fall of 1865, Henry Dyke, and his wife Catherine, built a cabin near what is now Rocky Cove, and overwintered there. The following spring, a fire destroyed the cabin and they were forced to return to Salvage. Encouraged in part by Dykes efforts, several Salvage families moved up the Peninsula in the fall of 1868, marking the beginning of permanent settlement. The new settlement of Salvage Bay first appeared in 1869 Census, with a population of 47, all formerly of Salvage. On January 25, 1870; JAMES BURDEN, who may have actually begun clearing land as early as 1865, received title to 107 acres. Burdens Farm would become one of the most successful commercial farming enterprises of the era, and would strongly influence the success and direction of the new settlement. By the end of 1870, twelve other pioneer families held 'land grants for Agricultural purposes'. Despite the success of farming, the Labrador Fishery remained the mainstay of local industry. Some pioneers, built their own schooners and sailed them to the Labrador, but the majority continued to fish out of Salvage, securing berths with vessels from that port.
In the late 1870's, a one room school house was built and the settlements first teacher, a Miss Ewing, may have taught classes there as early as 1880. The original schoolhouse, which also served Happy Adventure and Sandy Cove, burnt down in 1895 due to an overheated stove pipe. Mr. Walter Bugden, who would figure prominently in the Settlements history from his arrival in the early 1890's until he left in 1907, was the settlements teacher at the time. Under his leadership, classes continued, however, in a small building erected as a teachers residence. Two new schools, one at Salvage Bay and one at Happy Adventure were built c.1900. Restricted funding resulted in each being open for half of each year.
On September 14, 1890; Holy Cross Anglican Church was officially consecrated and has served the congregations of Eastport, Happy Adventure and Sandy Cove for more than a century.