Using natural energy, a water-powered sawmill was built down from the flume head to produce the lumber for the flumes. Flumes/canals were used to float lumber to new construction sites.

The mill actually straddled Sawmill Creek so that the sawdust could easily be disposed of and the lumber could float down the ditch and flumes to the construction sites. Other dams were built and water was guided to Angels Creek and as it followed the natural channel to Murphys a branch continued to Murphys Flat and Red Hill and another branch flowed through Owlsborough near the present-day Masonic Hall in Murphys.