Multistate mark–recapture models can be used to model migration through stratification of the study area into states (location). However, the incorporation of both tag loss and reporting rates is new to the multistate paradigm. We develop a migration model for fish that incorporates tag loss and reporting rates but has as its primary purpose the modelling of exploitation and natural mortality rates. This model is applied to a 2000–2004 yellowtail flounder ( Limanda ferruginea ) tagging study on the Grand Bank of Newfoundland, Canada. We found that exploitation rates varied over both location and years, ranging from 0.000 to 0.047. Migration into the centre of the Grand Bank (state 2) was three times higher than migration out. The estimate of the instantaneous annual natural mortality rate was 0.256, which is equivalent to an annual survival rate of 0.880. We describe how these mortality estimates will be quite valuable in specifying an assessment model for this stock.