The SM was merged into the Gilman Paper Company on January 11, 1999, and operated initially under the Gilman name. The Gilman Paper Company separated the railroad by establishing a limited liability corporation operating under the name of Saint Marys Railroad, LLC. On December 17, 1999, the paper plant and railroad were purchased by the Durango Paper Company (changing its name in 2000 to the Durango-Georgia Company) and the railroad was renamed the Durango Railroad. All federal reporting requirements for the railroad were filed under that name. The company declined to change its reporting marks however, thus the locomotives and rolling stock continued to use the St. Marys Railroad name.
The Durango Paper Company closed its doors in 2002 after two industrial accidents at the plant resulted in nearly $200,000 in fines from OSHA. All employees of the paper plant lost their jobs, putting the future of the railroad in doubt. The railroad continues to operate and the St. Marys Railroad right-of-way and assets remain intact. The railroad has always maintained its own locomotives and cars with a fully equipped shop facility in St. Marys.
In January 2007, the St. Marys Railroad, LLC was purchased by the Birmingham, Alabama-based Boatright Companies. The railroad continues to be fully operational with no change in its reporting marks.