POSEIDON NICKEL ANNUAL REPORT 2016

MT.WINDARRA

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BLACK SWAN SILVER SWAN

K L R E

PERTH

LAKE JOHNSTON

ESPERANCE

CONTENTS

Chairman's Report 4

COO's Report 8

Geology Update 10

Financial Statements 14

Directors' Report (including Corporate

Governance Statement and Remuneration Report) 16

Consolidated Statement of Financial Position 38

Consolidated Statement of Profit or Loss and

other Comprehensive Income 39

Consolidated Statement of Changes in Equity 40

Consolidated Statement of Cash Flows 41

Notes to the Consolidated Financial Statements 42

Directors' Declaration 75

Independent Auditor's Report 76

Lead Auditor's Independence Declaration 78

ASX Additional Information 79

Corporate Directory 83

Photography by Craig Kinder (F22) and Poseidon Nickel employees.

POSEIDON NICKEL ONLINE:

For the latest, up to date information on Poseidon Nickel, including latest placements, information and contact centres please visit us online at:

www.poseidon-nickel.com.au

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CHAIRMAN'S REPORT

WE REMAIN CONFIDENT THAT AT SOME POINT THE ECONOMIC FUNDAMENTALS OF SUPPLY AND DEMAND BALANCE WILL RESULT IN A RISE IN NICKEL PRICE WHICH WILL ENABLE OUR MINES AND PLANTS TO PROFITABLY OPERATE AGAIN.

Top Drive drillers commencing drilling which led to the Abi Rose discovery.

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