At 10.33 hours on 31 March 1941 the unescorted and neutral Castor (Master David H. Julin) was hit on the starboard side ahead of amidships by one G7a torpedo from U-46 about 430 miles east-southeast of Cape Farewell. The highly flammable cargo of the tanker immediately caught fire and the flames soon spread over the whole ship. The master and all other men that were in the forward part of the ship were lost, while the surviving crew members abandoned ship in both lifeboats from the after boat deck, but the starboard boat swamped because the ship still had headway. About 10 minutes after the torpedo hit, the survivors observed the U-boat in the starboard quarter of the burning tanker. Apparently the Germans identified the ship by reading the name on the stern and then left without questioning the survivors.

Some hours later, all 21 survivors got into the port lifeboat and took the damaged starboard boat in tow, but remained about a mile from the Castor which continued to burn fiercely. On 2 April, the flames had subsided and some men, led by the chief engineer officer, reboarded the wreck. They discovered that the fire was out, but heavy smoke was still coming from several places below decks. The engine room and the superstructure amidships and aft had been completely destroyed by the flames. The boarding party gathered together various useful articles in the forward store rooms before leaving the tanker again. At 12.00 hours on 3 April, the Otaio (Master Gilbert Kinnell) encountered the drifting and still smoking wreck in position 57°59N/32°08W and within 30 minutes picked up the survivors and both lifeboats, landing them later on Curaçao. The next day, they informed the escort of an eastbound convoy about the last position of the tanker, which probably foundered during the night of 3/4 April.