Poseidon Nickel Limited : Appendix 3B

Appendix 3B

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity Poseidon Nickel Limited ACN 060 525 206

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued

Shares

2 Number of +securities issued or to be issued (if known) or maximum number which may be issued
3 Principal terms of the +securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)
Do the +securities rank equally in all
4 respects from the date of allotment with an existing +class of quoted
+securities?
If the additional securities do not rank equally, please state:

• the date from which they do

• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

332,180

Fully paid ordinary shares

The issued Shares will rank equally with the existing class of quoted Shares.

+ See chapter 19 for defined terms.

01/11/2011 Appendix 3B Page 1

5 Issue price or consideration Issue price of $0.1965 being the 92 day VWAP for the

December 2011 quarter

6 Purpose of the issue
(If issued as consideration for

To Directors in lieu of Fees for the September 2011

Quarter as approved by Shareholders at the 2011

acquisition of assets, clearly iden November Annual General Meeting;
those assets)
7 Dates of entering +securities into uncertificated holdings or despatch of certificates

27 January 2012

8 Number and +class of all +securities quoted on ASX (including the securities in clause 2 if applicable)
9 Number and +class of all +securities not quoted on ASX (including the securities in clause 2 if applicable)

2,500,000 31 July 2012 Unlisted Options

9,267,436 31 August 2012 Unlisted Options

115,000,000 19 September 2012 Unlisted

Options

533,000 22 October 2012 Unlisted

Options

2,000,000 31 December 2012 Incentive

Options

2,975,000 31 August 2016 Unlisted Options

(Employee)

4,500,000 23 November 2016 Unlisted

Options

36,531,904 March 2011 six (6) year USD

$15m Unsecured Convertible Notes valued on an exchange rate of $1.0265 convertible at $0.40

64,945,608 March 2011 six (6) year USD

$20m Unsecured Convertible Notes valued on an exchange rate of $1.0265 convertible at $0.30

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)
Not Applicable

Part 2 - Bonus issue or pro rata issue

Questions 11 to 33 are not applicable.

Part 3 - Quotation of securities

+ See chapter 19 for defined terms.

01/11/2011 Appendix 3B Page 2

You need only complete this section if you are applying for quotation of securities

34 Type of securities

(tick one)

(a) X Securities described in Part 1
(b) All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Questions 35 to 42 not applicable

Quotation agreement

1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
2 We warrant the following to ASX.

• The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those +securities should not be granted

+quotation.
• An offer of the +securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.
Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.

• If we are a trust, we warrant that no person has the right to return the

+securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

+ See chapter 19 for defined terms.

01/11/2011 Appendix 3B Page 3

Sign here: Date: 27 January 2012
Print name:

Ross Kestel

Company Secretary

+ See chapter 19 for defined terms.

01/11/2011 Appendix 3B Page 4