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Volunteer rescuers aged 78 and 62 died after their boat rolled during "treacherous" conditions.
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Emergency services were called at 18:15 local time on Monday after a member of the public reported a yacht in trouble off the break wall in South Ballina, a popular coastal destination close to the NSW and Queensland border.
A Marine Rescue NSW crew of six rushed to the scene but their boat capsized in rough conditions as it crossed the Ballina Bar, police said. Two rescuers, aged 78 and 62, died.
Four rescuers made it to shore with minor injuries and a search was called off early on Tuesday after everyone was accounted for.
The body of a third man, aged in his mid-50s, was found on the sand nearby and is yet to be formally identified. He was not wearing a life jacket at the time, police said.
"It has been a terrible night for Marine Rescue NSW and our focus right now is supporting the families of those affected and our volunteers," a spokesperson for the volunteer organisation said on Tuesday.
Marine Rescue NSW Commissioner Todd Andrews said the death of two rescuers was a solemn reminder of the risks faced by volunteers.
"These two men were serving their local community and have made the ultimate sacrifice to help others," he said on Tuesday.
Superintendent Joe McNulty from the NSW Police Marine Area Command said the conditions on Monday evening had been "treacherous", according to the Australian Broadcasting Corporation (ABC).
"We need to remember and reflect on the heroic actions of this crew overnight," McNulty said, as he paid tribute to the Ballina marine rescue unit that attended the scene.
"These people do a fantastic job, volunteers in the community and putting their life at risk to go and save another vessel that was stricken and in danger."
The yacht - which hit the break wall and broke apart - has since sunk, police said.
McNulty said divers may return to the scene on Thursd
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