$2 Photo Believed to Be Billy the Kid Valued at $5M

— -- A California company says it has authenticated and is selling one of the "holy grails of Western Americana" only the second confirmed image of the notorious bandit Billy the Kid.

The 4-by-5-inch photograph was bought for $2 in 2010 at an antique shop by Randy Guijarro of Freemont, California.

According to Kagin's Inc., a firm specializing in Western Americana and rare coins, the photograph shows Billy the Kid and members of the Lincoln County Regulators gang "playing a leisurely game of croquet alongside friends, family and lovers in the late summer of 1878."

Billy the Kid, a member of the Lincoln County Regulators, was among the most notorious figures of the early frontier and a legendary outlaw in the Wild West. According to legend, he killed anywhere from eight to 22 people and took part in New Mexico's Lincoln County War.

Kagin's said the photograph had been appraised and insured for $5 million.

Don Kagin, the president and owner of Kagin's Inc., said that Guijarro had come to the firm about a year ago with the image. Kagin said Guijarro believed that the image of Billy the Kid was the real deal and had spent the last year working with experts to have his suspicions confirmed. When he returned recently to Kagin's with his findings, the company met with more experts and then set out to confirm one last detail: the image's location in New Mexico.

"[We] nailed exactly not only the terrain, but the building [in the image]," Kagin said. "That really nailed it."

David McCarthy, a senior numistatist at Kagin's who flew to New Mexico to find and authenticate the exact location of the image, called that moment an "incredible thrill."

"We have these moments of discovery every once in a while," he said. "You get goosebumps."

McCarthy said that when he'd initially seen the photograph, what really jumped out at him was Billy the Kid's posture and face.

"The way he held his body in the photo, [a] sort of confident slouch," McCarthy said. "[He's] facing the camera, dead on, with a grin on his face."

McCarthy said he and his team found that the building in the image was a 15-minute walk from the home of John Tunstall, Billy the Kid's mentor. He also said that Tunstall was a Brit who had written in his diary about playing croquet regularly with friends. According to McCarthy, research had also revealed that a wedding and a cattle drive after the Lincoln County War, which Billy the Kid had participated in, were likely the reason behind the gathering.

"Billy the Kid is incredibly famous," McCarthy said. "[But] he wasn't shooting people all the time. He had friends he cared about. He had women he chased. It (the photograph) opens up the idea about the humanity of a character like Billy the Kid."

Kagin told ABC News today that this new image was even more exciting than the first picture because it revealed "a slice of life," one in which Billy the Kid is seen taking a break from the turmoil and enjoying company.

According to Kagin's, the only other known image of Billy the Kid was taken in New Mexico in 1880. The tintype image shows Billy the Kid with a holstered Colt pistol and wearing a black hat. That photograph was purchased for $2.3 million in 2010 by private collector William Koch.

The current photograph and Guijarro's journey to get it authenticated will be the focus of a documentary airing Sunday on The National Geographic Channel.

"This is such a great story," Kagin said. "He's one of the great outlaws and personalities."