The federal government granted the first lease for large-scale mechanized mining in 1897. Forty large leases were given out, some on ground too poor to hand mine but many on the main creeks in the Klondike drainage.
The Guggenheims consolidated their claims and leases as the Yukon Gold Company in 1907 and it operated up to nine dredges until 1925. The Yukon Consolidated Gold Corporation operated up to 12 dredges from 1925 to 1966.
A dredge is a floating sluice plant that pivots on a “spud”, maintaining a pond as it mines. The bucket line continuously excavates dirt and gravel which is processed through a series of screens and sluice runs. The waste - called tailings - is fed onto a sloped belt, or tailings stacker, that swings from side to side to create rows of crescent-shaped piles of washed gravel.
A Klondike dredge could dig and process up to 16,000 cubic yards in 24 hours. Dredge #4 - which can be visited on Bonanza Creek - dredged 65 million yards in 46 years. The largest dredges recovered up to 800 ounces of gold a day.
The dredges were very efficient at recovering all but the finest gold and large nuggets. The ground missed by the dredges as they turned across the valley was very profitable for later miners.
The first Klondike mining leases were granted for hydraulic operations which needed more water than was available in the Klondike drainage. Joe Boyle and A.N.C. Treadgold conceived the idea of bringing water from the Tombstone Mountains north of Dawson City. The gravity-operated system used a 340-metre difference in elevation.
The Yukon Ditch was a 113-km system of flume (32 km), ditch (61 km) and pipe (20 km) that carried 200,000 litres of water per minute. More than seven million board feet of lumber was used in its construction. The flume was six feet wide and four feet deep. The redwood stave pipe, up to four feet in diameter, was bound with half-inch bands of iron.
Construction took three years with most of the freighting done in the winter using horse-drawn sleighs carrying up to 16 tons. A powerhouse on the Little Twelvemile River supplied power to construct the Ditch and later run the dredges. The project cost over three million dollars to build and employed thousands of men.
The Yukon Ditch operated between 1909 and 1933 when it shut down due to a low price for gold, a shortage of employees and rising maintenance costs.