Blacksmith Altran:
According to Roien's research, the blade was broken into two parts, and they are probably somewhere in the Elven Ruins. They may even be in the dirty hands of the Orcs that live in the ruins... But those Orcs don't know how to deal with Steel, and probably don't have the skills to reassemble the pieces. They're probably using it to skin rabbits or something.
Go to the Elven Ruins and search for the two pieces of the broken blade. I'm sure you don't know the way, so I will write down the directions on this note. Be careful! They say that the ruins are not only full of Orcs, but other savage beasts as well.