Gage transferred to the fifth-rate HMS "Minerve" in January 1796, and having been promoted to lieutenant on 11 March 1796, he took part in the capture of the Spanish ship "Santa Sabina" in December 1796. He also took part in the Battle of Cape St Vincent in February 1797 and led the "Minerve"'s boats' crews in company with those of the frigate in the cutting out of the French ship "Mutine" at Santa Cruz, Tenerife in May 1797. Promoted to commander on 13 June 1797 and to captain on 26 July 1797, he became commanding officer of the fifth-rate HMS "Terpsichore" and sailed to the Mediterranean to conduct the Siege of French-held Malta. In HMS "Terpsichore" he also conveyed Charles Emmanuel, who had just abdicated as Prince of Piedmont, to exile in Sardinia in February 1799 and captured the Spanish ship "San Antonio" in June 1799. In July 1800 he was involved in an incident in which his squadron stopped and searched a Danish convoy heading for France: the incident led to the formation of the Second League of Armed Neutrality, an alliance between Denmark–Norway, Prussia, Sweden and Russia.