A year after his arrival he found coarse-gold near Birch Creek, the site, 30 years later, of the gold rush town of Circle:City.
McDonald worked hard at Fort Yukon. He held services for the people of the First Nations and the few non-natives at the fort, and taught both the indigenous people and illiterate propectors and traders to read. By 1866 he knew enough of the Loucheux language to preach without an interpreter.
After Fort Yukon was taken over by the Americans in 1870, McDonald moved to Fort McPherson and began serving the entire Yukon basin, travelling more than a thousand miles a year across the Richardson Mountains to visit individual bands.