Mount Nibel - FF7 Walkthrough
You can find the entrance of Mount Nibel by taking the northeastern most exit out of Nibelheim and traveling briefly across the World Map until you find yourself in the same area as my screen shot above. In the first area of Mount Nibel you'll want to go north when possible to claim the two treasure chests (both marked in my screen shot below).
Rune Blade (Cloud Weapon)
Plus Barrette (Red XIII Weapon)
Note: The path leading up to the second treasure chest is found by going to the right just before the wooden bridge.
In the next area of Mount Nibel you'll come across five different pipes - don't take any of them yet!! Before you go down any of the pipes you're going to want to go down the stairs and drop the one ladder that's half lowered (shown in my screen shot above). Doing this allows you to collect all of the treasures in this area.
Note: If you went down one of the pipes take the exit just south of the Materia Keeper boss, the one he isn't guarding. This takes you around a very long route of this dungeon and to the door shown in the screen shot above just below where the pipes are.
Two platforms below the pipes you'll find a door that leads to the Nibelheim Mako Reactor as well as the Sniper CR treasure (a weapon for Vincent). To find the Sniper CR you'll want to take the path south of the Mako Reactor until it loops around the mountain to a cave entrance. Inside is the Sniper CR.
Sniper CR - South of Mako Reactor
Elemental Materia - Southwest of Sniper CR treasure
Elixir - South of Elemental Materia
Steal & Enemy Skill Advice: In this area of Mount Nibel you'll have a chance of encountering a Green Dragon enemy which you can Steal a Gold Armlet from and learn the Enemy Skill Flame Thrower if you haven't already. The Gold Armlets can be purchased in Rocket Town, the town after this dungeon.
Take the southwestern exit out of the room with the Sniper CR to find a large room we visited during a flashback scene with a fountain in the middle (pictured above). This room has an Elemental Materia inside of it for you to collect. Take the southern exit out of this room and you'll find another treasure chest which contains an Elixir. To reach the Elixir go into the northern cave entrance and to the left, down through the black part on the side of the screen. You'll come out next to the treasure.
Now you're going to want to return to the room with the five pipes that we started in.... Two of the pipes lead to treasure chests, the 2nd and 4th ones - the rest are dead ends. Use my screen shot below for additional guidance if needed, the pipes that lead to loot are marked.
Powersoul - 2nd Pipe
All Materia - 4th Pipe
Once you've collected all of the goodies it's time to face the boss of this dungeon - the Materia Keeper! This boss can teach you the Trine Enemy Skill which is one of the two Enemy Skills you can permanently miss in this game. Aside from this boss there's only two more enemies that will teach you this ability.
You'll find the Materia Keeper boss in the southeastern portion of the room with all of the pipes - you've probably already seen him while here. Walk up to him and press the confirmation button to engage him. After the fight he will drop a Counter Attack Materia on the ground which you'll want to be sure to pick up. With that in hand, leave through the exit the boss was guarding.
Our next stop is Rocket Town which is northwest of Mount Nibel's exit, it's sitting right out in the middle of a field so you can't miss it.