Bring Bernice's Necklace to "Auntie" Bernice Stonefield at the Stonefield Farm.
I was playing near the Fargodeep Mine, and I think I dropped, er...I mean I saw, the old lady's necklace. Don't ask me how it got there...it wasn't me!
Well anyway, I saw this big, gold-toothed kobold pick up the necklace and run back to his den above the mine. Go find that kobold and you'll find the necklace, I swear!