In 1897 prospectors on their way to the Klondike gold fields gave Coal Creek its name when they discovered deposits of coal several miles upstream. The gold-seekers were interested in coal because it could be sold as fuel to paddlewheel steamboats, but they were soon distracted by signs of gold in the gravels of the streambed.
The men and women who arrived in those early days began small-scale placer mining along Coal Creek. Using picks, shovels, and long sluice boxes that they built on site, the miners began the backbreaking process of separating gold from creek gravel. By 1901 mining claims lined both sides of the creek from its mouth to at least 10 miles upstream, and a handful of miners built log cabins and stayed on their claims during the winter. Others worked their claims only in the summer and spent winters in Circle, Eagle, or Fairbanks. For the next three decades, a small but determined cadre of miners built ditches to divert water to their sluice boxes and cut trees for firewood to feed the small steam boilers used to thaw the permanently frozen ground known as permafrost.
Trees were also cut for building material. A similar process occurred in the neighboring Woodchopper Creek valley, and over time, both drainages were largely deforested at lower elevations. Miners used ditches and dams to run water through their sluice boxes and to uncover gold-bearing gravels, and the creek often ran brown with sediment dislodged by their activity. At Coal Creek, miners often processed up to 80 cubic yards of gravel to obtain a single ounce of gold. At this rate, miners were compelled to augment their income by trapping, woodcutting, and other odd jobs.
Dramatic change came to Coal Creek in 1935 when Alexander McRae, a Canadian millionaire and mining investor, decided to buy out the old-timers’ claims and import an enormous gold dredge capable of overturning the earth to extract millions of dollars in gold. To facilitate mining on an industrial scale at Coal Creek, McRae’s company, Gold Placers, Inc., built an 8-mile road from the Yukon River to the upper creek valley, a camp to feed and house the dredge crew, and a system of pipes and water diversions to harness the incredible power of water under pressure.
Once this infrastructure was in place and the dredge was built, the Coal Creek watershed would never be the same. The practice of placer mining by machine is a multi-step process that involves stripping the land of trees and topsoil, thawing the permanently frozen ground below, and excavating enormous amounts of gravel with the dredge as it eats its way across the landscape.
Water is essential to placer mining, and at Coal Creek the employees of Gold Placers, Inc. used water cannons to blast away topsoil and to speed the thawing of the permafrost. They diverted water to create lakes in which the dredge floated on its steel pontoons. And they washed thousands of tons of sediment into the creek.
As the gold dredge moved up and down the Coal Creek drainage it excavated 20′ into the earth and scooped thousands of tons of gravel into its gravel-washing interior. Whereas a single miner using hand-tools might wash 1 cubic yard of gravel in a day, the dredge processed 3,000 cubic yards in a twenty-four-hour period. Water jets, revolving tumblers, and multiple sluice boxes separated gold from the waste material, which poured out of the back to create arc-shaped mounds of discarded rock called tailings.
The dredge operated nearly continuously for the next twenty years, meandering wherever the richest concentrations of subterranean gold could be found. In the process, the channel of Coal Creek was repeatedly altered, and most of the valley floor was scooped up, processed for gold, and re-deposited, ultimately producing around $3 million in precious metals. After major operations under Gold Placers, Inc. ended in 1957, individuals leased the dredge and mining claims, mining periodically in the 1970’s and 1980’s.
Today the dredge’s tailings, tell-tale signs of industrial placer mining, cover roughly 8 miles of the Coal Creek valley.