Four recreational spear fishers were rescued from the water off Broughton Island on Monday morning after their vessel capsized and sank soon after setting out on a fishing trip.
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Australian Maritime Safety Authority response centre duty manager Joseph Zeller said the Westpac Rescue Helicopter Service was tasked to the scene after the 4.8 metre vessel's emergency position indicating radio beacon (EPIRB) was detected just after 7.20am.
"Because the vessel owner had done all the right things - registered the EPIRB, told his emergency contact where they were going and when they were expected back home - we were able to initiate a rescue quickly, knowing what we were dealing with," Mr Zeller said.
Leo Hamilton, 21, Ian Hamilton, 57, Noah Hamilton, 23, and family friend Moritz, 26, from Newcastle were found floating in the water by Jeff Thompson and Adam Krajc who had been fishing nearby.
Mr Thompson said they were alerted to an issue after noticing a flare in the water. They went to investigate and found the four men "bobbing in the water".
"They had been there for 30 minutes after their boat sank," he said.
"They were very lucky... but they were safe due to the safety gear they had and were very well prepared in case of an emergency.
"That preparation ultimately lead to their rescue. And of course us being in the right place at the right time. We are both very glad that there was a good outcome. This could have been a tragedy.
"A big thanks to Marine Rescue and Search and Rescue NSW [sic] for the great work they do on a daily basis. Us fishos are grateful for their commitment to our waterways."
Mr Thompson and Mr Krajc pulled the four Newcastle men out of the water, to safety, and transferred them to Broughton Island where they were met by the Westpac rescue helicopter and underwent a medical assessment.
Marine Rescue Port Stephens then transferred the four men to Nelson Bay where an ambulance was waiting to conduct a further assessment.
It is not known what caused the vessel to capsize and sink.
The Nelson Bay-based Marine Rescue unit praised the fishermen for being well prepared for their trip, which resulted in a "good outcome".
"The four guys were all experienced divers and their boat was well equipped," the unit stated.
"They all had life jackets which they were wearing; they carried a life cell which contained their safety equipment and also assisted their flotation; they carried an EPIRB which they activated; they used other equipment such as the Eskies to keep them afloat.
"The four guys can smile because of their experience, the safety equipment they carried and the fast response by [emergency services].
"Sad loss of a boat and valuable equipment but a good outcome today."
Mr Zeller echoed the Marine Rescue unit's praise for the skipper having all the right emergency equipment on board and knowing how to use it.
"Setting off the flare resulted in a rescue soon after their vessel capsized, which meant that when rescue authorities arrived on scene, the four people were out of immediate danger," he said.
"We can't stress enough the importance of having your safety equipment in order.
"This rescue is a good example of how smoothly rescue authorities and others around you can respond when you have the right equipment, it's accessible in the event of an emergency, and you know how to use it."