Mt. Corel
Items:
Wizard Staff, Star Pendant, W Machine Gun, Turbo Ether, "Transform" Materia, Phoenix Down (x10), Power Source, Mind Source, Tent
Head west from Costa del Sol to find Mt. Corel, which is at the end of a winding path through the mountains. Mt. Corel is pretty much a straight path, but it's full of surprisingly strong enemies. Keep a close eye on each character's health during battles.
You'll see another Mako Reactor shortly after entering Mt. Corel. You just can't seem to get away from these things. There's nothing to do here at the moment, but make a mental note of its location.
When you exit the reactor area, you'll start walking on some old railroad tracks that occasionally break. If you fall, hold Left or Right on the D-Pad and tap the O button as fast as possible. This enables you to pick up one of two items as you climb up. The item on the left side is the Wizard Staff; the item on the right is a Star Pendant. You'll get three chances, but you can only pick up each item once.
It's impossible to get across the low bridge at the end of the tracks because someone left the draw beige up. Instead, go back and take the high road over the water. This path leads to a dead end, but it also leads to the bridge's control.
Next to the bridge controls you'll hear the sound of chirping. Climb up the wall at that spot and you'll see a bird's nest resting on some treasure chests. You can take the treasure (10 Phoenix Downs) if you're conscience allows it, but you'll disappoint your partners, plus you'll have to fight a Cocktails.
Go back down to the lower tracks and follow your partners. As they turn to the right, you need to take the left split because buried in the hill under the tracks is a cave with an out-of-work miner. You can pick up useful items along the way.
Now jump back on the tracks and follow the path until you reach a small town named North Corel.