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The townsite of Denmark, located on the south coast 51 kilometres west of Albany, was gazetted a townsite in 1909. It is located on the Denmark River from which it derives its name, the river having been named by the explorer Dr J B Wilson RN in December 1829. Wilson named it the "Denmark" in compliment to his friend Dr. Alexander Denmark R.N. a physician to the fleet. The Aboriginal name "Koorrabup", recorded by Alfred Hillman in 1833, also refers to this area.
Although a townsite was not declared here until 1909, a settlement of this name had existed here for some years previous. A Millars Bros. Timber mill was established on the banks of the river in 1894.