When investigating the town records at the Phandalin Townmaster's Hall, Sildar Hallwinter learns that a goblin tribe called The Cragmaws moved into the region in the regions several years ago and quickly came to be the dominant goblin tribe in the area. They're headquartered at Cragmaw Castle, but he cannot find any information on its location. The Lords' Alliance believes that Phandalin will not be able to prosper and trade will continue to be severely disrupted until the Cragmaw tribe is removed from the castle. He offers The Party 500 GP to clear out the goblin threat from Cragmaw Castle, which might also benefit them by providing a clue to the whereabouts of Gundren Rockseeker.
After speaking with Sildar Hallwinter, The Party learns that Gundren Rockseeker believes he found the lost Forge of Spells in an area near Wave Echo Cave, a remote and difficult to find natural cave in the area around the village of Phandalin. Gundren Rockseeker drew of map to the location and had it on him when he and Sildar Hallwinter were on The Triboar Trail on the way to Phandalin. Klarg and his band of goblins were ordered to kidnap Gundren Rockseeker and bring him to someone named Black Spider, but Sildar Hallwinter doesn't know who that is or where Gundren Rockseeker was taken. Klarg was one of the leaders of The Cragmaw goblin tribe and sent the map to their stronghold at Cragmaw Castle, but Sildar Hallwinter is unaware of its location.