In 1898, prospectors Mix Silva, Edward Findley, and Perry Wiley, grubstaked for Jack Dalton, discovered placer gold on Porcupine Creek north of Haines near the Dalton trail. Subsequently, the Porcupine mining district was organized on October 22, 1898.
On November 5, 1898, Dalton and his three prospectors located the Discovery Claim; additional claims were located by Dalton and his business partners E. B. Hanley and John Malony. The district was stampeded in 1899 and prospectors found gold in the nearby creeks and gold or copper in areas as much as sixty miles distant, including the Rainy Hollow district in Canada. The first-years gold production was reportedly worth $50,000, of which about $40,000 came from Dalton's Discovery Claim.
The deposits in the district were rich but fairly deep and needed complex infrastructure. Miles of ditches and flumes were built to supply water to hydraulic lifts, sometimes called gravel elevators, where miners recovered the gold. Commercial support to the new district was conveniently supplied by the Porcupine Trading Company which was organized by Dalton, Hanley, and Malony on August 1, 1899. The company brought in mining equipment and extended liberal credit to other miners.
In 1900, Dalton and party shipped in 300 tons of equipment and supplies. The mines operated profitably until about 1905 when a major flood washed out a considerable amount of the mining infrastructure. Recognizing that they had probably extracted most of easily won gold, Dalton, Hanley, and Malony sold their interests, profitably, in 1907.