Talk to Joseph in the Rookridge Inn in order to accept the quest. Afterwards, head outside and climb the nearby hill. Hop onto the train tracks and follow them until the tracks are obstructed. Work your way around the blockage and enter the mine shaft located here.

Once inside, follow the tunnel (and grab the chest as you go) until you reach a large open room. Work your way town to the lower level and you will be in a circular room with a troll. Simply use the standard troll-slaying tactics to defeat the troll in here.

View Full-size

Find the mine shaft near the train tracks (left) and kill the troll inside (right).

When the troll is dead and gone, loot the chest behind him, back track out of the cave and return to the inn to collect your reward.