On August 16, 1896, an American prospector named George Carmack, his Tagish wife Kate Carmack, her brother Skookum Jim and their nephew Dawson Charlie were travelling south of the Klondike River. Following a suggestion from Robert Henderson, another prospector, they began looking for gold on Bonanza Creek, then called Rabbit Creek, one of the Klondike's tributaries. It is not clear who actually discovered the gold: Carmack later claimed he found it, while Skookum Jim and Dawson Charlie later argued that Jim had been responsible. In any event, gold was present along the river in huge quantities.
Carmack measured out four claims, strips of ground that could later be legally mined by the owner, along the river, including two for himself—one as the initial claim, the second as a reward for having discovered the gold—and one each for Jim and Charlie. Jim later stated that Carmack's extra claim was really his and had only been staked in Carmack's name because the group felt that others would be reluctant to recognize a claim made by an Indian. The claims were registered next day at the police post at the mouth of the Fortymile River and news spread rapidly from there to other mining camps in the Yukon River valley.
By the end of August, all of Bonanza Creek had been claimed by miners. A prospector then advanced up into one of the creeks feeding into Bonanza, later to be named Eldorado Creek. He discovered new sources of gold there, which would prove to be even richer than those on Bonanza. Claims began to be sold between miners and speculators for considerable sums. Just before Christmas, word of the gold finds finally reached Circle City, the nearest large settlement in Alaska. Despite the winter, many prospectors immediately left for the Yukon by dog-sled, eager to reach the region before the best claims were taken.
The outside world was still largely unaware of the news and although Canadian officials had managed to send a message to their superiors in Ottawa about the gold finds and the rapidly increasing influx of prospectors, the government did not give the matter much attention. The ice prevented river traffic over the winter and it was not until June 1897 that the first boats left the area, carrying the freshly