He must be talking about the blacksmith quest at the very beginning of the game. I found it the first time I played but I don't remember how and now I've restarted the game and I can't find it either.
I managed to get it this way, but I don't know during which fight. I did several fights but each time it didn't give me it in the list of items received. It was later when I looked at my inventory that I saw that it was there.
