Oh I forgot to ask if you played on browser or PC. Well, I think I'll add a feature to the debug window that marks your progress in quests sometime in the future. This way anyone can figure out where they are.
Also, I think I figured out where the issue was! The orb in the kobold cave was copied from the cliffside ruins', which was made before the feature to return there was in place. So what happens is that whenever you get the orb from either dungeon, the mithril quest is set to step 1, which requires you to learn the password to progress. As you're already past the point you learn the password, the quest reverted and you can't progress. Thanks for the help and sorry for the incovenience. It's gonna be fixed in the next patch, and you shouldn't need to reload a previous save. Just talk to the smith twice and the quest should go back to its intended step if you have mithril ore in your inventory.
Also also, there isn't any lich in the kobold dungeon, so I'm not entirely sure what you're talking about... The guy at the entrance pays you if you beat the kobold king. The golems are there just to protect the orb so there isn't any more reward for beating them. There is a lich in the cliffside ruins tho (where you first meet Mulach) and beating it gives you a skull you can trade for a reward at the end of chapter IV. I forgot to add a way to trade it if you get the skull later though, so I'm adding it now as well. Thanks for pointing that out!
(But wow and here I thought all the bugs were solved at this point. I can see why devs like making linear games so much lol)
Edit: Just updated the game. Everything should be working fine now. Thanks again for the help!