In 1834 the HBC tried to establish a post on the Stikine River, British rights to which had been one of the terms of the Russo-British Treaty of 1825. The effort was blocked, temporarily, by the Russians, resulting in high-level negotiations between the British and Russian governments. One result of these negotiations was the 1839 ten-year lease of what is today the Alaska Panhandle. Under the terms of the agreement the HBC had the right to establish posts, hunt, and trade furs along the coast in exchange for furnishing the Russian American Company with food. The HBC took advantage immediately, sending James Douglas north in the Beaver in 1840. Douglas explored the Taku River and built Fort Durham (or Taku) on the coast just south of the river's mouth. He also took possession of Redoubt San Dionisio (Fort Saint Dionysius), which lay off the mouth of the Stikine River on Etolin Island, near today's Wrangell, Alaska (and renamed it Fort Stikine), which the Russians had agreed to transfer to the HBC under the 1839 lease agreement.
In 1841 the HBC governor George Simpson ordered Fort Durham and other coastal posts closed, because the Beaver was able to conduct the coastal fur trade without the need for more than the single permanent post of Fort Simpson. The HBC closed operations at Fort Durham in 1843.