Since the British also knew that by law the fleet could only land at Cádiz, as well as its place and approximate time of departure from South America, it was not difficult to position a squadron to intercept it.

On 22 September Admiral Cornwallis ordered Captain Graham Moore, commanding the 44-gun razee frigate HMS Indefatigable, to intercept and detain the Spanish ships, peacefully, if possible.

Bustamante naturally refused to surrender and, impatient of delays, at 10 a.m. Moore ordered a shot be fired ahead over the bows of Medea.

Within ten minutes the magazine of the Mercedes exploded destroying the ship, and killing all but 40 of her 240 crew, including almost the entire family of the future Supreme Director of the United Provinces of the Río de la Plata, Carlos María de Alvear, who (being 16 years old at the time) witnessed the explosion alongside his father from the Medea.

In practical terms, the British interception of the four Real Armada frigates represented the end of an era for Bourbon Spain and regular specie shipments from the Spanish Empire's New World mines and mints.

Spain declared war on Great Britain on 14 December 1804, but suffered a catastrophic defeat less than a year later at the Battle of Trafalgar in October 1805.