A 38-year-old man was fighting for life last night after being dragged from the water unconscious three hours after the boat he and a mate were fishing in sank off Two Rocks.
David Navin and neighbour Ivan Hallissey, 36, ended up in the ocean when a wave swamped their centre console just after 10am as they fished about 5km offshore, police believe.
Their emergency beacon was activated, triggering a search, but the signal was lost after 40 minutes, leaving water police, sea rescue volunteers and helicopter crews scouring a 360sqkm search area.
There was no sign of the stricken boat but police spotted Mr Hallissey in a lifejacket waving frantically for help about 1pm.
An unconscious Mr Navin was soon found drifting about 150m away, also wearing a lifejacket.
The men had hypothermia and chemical-type burns to their backs and legs and were taken to Two Rocks marina.
As the rescue boats pulled into the dock, Mr Navin's fiancee Ember frantically made her way to the wharf edge.
As paramedics tried desperately to revive Mr Navin, Ember clutched her mother's hand and screamed: "David! David! Come on David! Please wake up."
St John Ambulance paramedics worked on Mr Navin for several minutes at the marina before taking him to Joondalup Health Campus, where he remained in a critical condition last night.
Mr Hallissey, who was reunited with his wife Monica Moran- Hallissey at the marina, was able to walk to the ambulance for treatment.
He was also treated at Joondalup Health Campus but was transferred to Royal Perth Hospital last night.
Water Police Sgt Michael Wear said one of the fishermen indicated that a wave had crashed over the back of their 5.5m boat and it started to sink.
Authorities do not think an explosion or fire on the boat caused the men's burns.
"Our understanding is that both men are suffering some kind of vapour burns from the fuel," Sgt Wear said.
"The fuel has spilled into the water and they've been in the middle of that fuel."
One of the men had bought the boat on Sunday and Sgt Wear said the emergency beacon was still registered to the previous owner.
Police were able to get in touch with him and the new owner's family, so they soon knew he was out at sea and who was with him.
Sgt Wear said Mr Navin and Mr Hallissey had left Two Rocks marina about 7.45am to go fishing and were not expected back until the afternoon.
"Their families were not aware anything was wrong until police contacted them to say the EPIRB had been activated," he said.
Police and the Department of Transport will investigate the incident but there were no early indications that the boat was unseaworthy.
It is believed the boat sank but police were not sure where it went down or if it would be recovered.
Police were waiting to speak to the injured men.
Sgt Wear said yesterday's conditions were fine for being out in a boat, with just a 1m swell.
But the water would have been cold.
"Three hours in the water can be quite a critical time, especially with hypothermia," Sgt Wear said.
"They have done the right thing.
"They have the safety equipment, they have lifejackets on.
"It goes to show that no matter what the conditions, you always have to be mindful of the ocean and have all the right safety equipment onboard.
"They are lucky to be found but it shows the search and rescue system we have and all the safety equipment they had on board works, that's why we were able to find them."
Three boats, three helicopters and a plane were involved in the search.