Pizarro and Almagro decide, after much wrangling, that Pizarro will stay at a safer place, the Isla de Gallo, near the coast, while Almagro will return yet again to Panama with Luque for more reinforcements—this time with proof of the gold they had just found and the news of the discovery of an obvious wealthy land they had just explored.

The new governor of Panama, Pedro de los Ríos, has learned of the mishaps of Pizarro's expeditions and the deaths of various settlers who had gone with him.

Fearing an unsuccessful outcome, he outright rejects Almagro's application for continued resources.

In addition, he orders two ships commanded by Juan Tafur to be sent immediately with the intention of bringing Pizarro and everyone back to Panama.

The leader of the expedition has no intention of returning, and when Tafur arrives at the now famous Isla de Gallo, Pizarro draws a line in the sand, saying: "There lies Peru with its riches; Here, Panama and its poverty. Choose, each man, what best becomes a brave Castilian. For my part, I go to the south.”