This paper considers the problem of localising a stationary signal source using a team of mobile agents which only take binary measurements. Background false detection rates and missed detection probabilities are incorporated into the framework. A Bayesian estimation algorithm that discretises the search environment is employed, and analytical convergence and consistency results for this are derived. Fisher Information is then used as a metric for the design of optimal agent geometries. Knowledge of the probability of detection as a function of the source and agent locations is assumed in the analysis, with special attention given to range-dependent functions. The behaviour of the algorithm under inexact knowledge of the probability of detection is also analysed. Finally, simulation results are presented to demonstrate the effectiveness of the algorithm.