Bestowal Dialogue: 'That we can forge this key, I have no doubt, but there are some items we will need before we can begin. Master Elrond's instructions say that we need mithril, but there is none to be had in the Blue Mountains. Also, we will need something to cast a mould from. 'Now, one of the gifts Bilbo took back from the Lonely Mountain was a nugget of mithril. I doubt he understood its value, so he probably left it behind when he returned to Rivendell. However, he may have given it to the Mathom-house in Michel Delving. Perhaps the Keeper of the Mathom-house can help you with that.