You’ll find a corpse on your right holding x3 Explosive Stone Clump as you enter the tunnel, as well as the standard elevator down. If you want to grab x3 Cracked Crystal, instead of riding the elevator, walk onto the far left beam that supports it and look down, where you’ll see a ledge you can jump to. Keep in mind that there’s so much Cracked Crystal in this tunnel that it may not be worth it unless you really enjoy platforming.
If you do drop, the first little tunnel has nothing, but you acn turn around and jump down to your left to find the Cracked Crystals in the wall. Then continue dropping down counter-clockwise to make your way to the bottom of the elevator shaft.
Grab the site of grace and then proceed into the tunnel. You’ll round a bend where there will be a lot of Cracked Crystal in the wall, and then just ahead is a shack. Inside you’ll see a miner with a lantern who’s surrounded by flame barrels. Rush him before he can shoot flames and blow the place up (you can sprint and then circle around and backstab him), but know that there is a dog behind him you’ll need to deal with right afterwards.
Leave the little shack and grab the summoning pool that’s on your left when you go down the stairs of the shack, and then go south past the summoning pool to find a Smithing Stone  in the wall. Then continue past the summoning pool heading northwest, where you’ll find yet more cracked crystal in the walls. Just beyond all the crystal is a large open area — start by going right on the walkway and climbing up the ladder.
Continue northwest into the tunnel, and begin sneaking. In the next room are a couple of miners doin’ their thing, and a soldier sitting on the ground who you can sneak up to and backstab. Do the same with the miners, and then head into the shack and kill the two dogs there who guard the Boltdrake Talisman +1. Leave the shack and loot the crystals in the wall, as well as the corpse behind the wooden shack with the Stanching Boluses. Don’t miss the Somber Smithing Stone  on the left side of the shack! In the northern corner of the room, there are three explosive barrels in an alcove — roll through them to find a Smithing Stone .
Now head back the way you came to re-enter the large open area. Don’t go down the ladder, but instead roll through the stacked wood and drop down to the right (south).
Continue on this walkway and take out the two miners on the platform at the far end, and grab the upgrade materials they’re mining. There’s a corpse here as well that holds a Golden Rune . Now head back the way you came, up the stairs to where you dropped down, and drop onto the roof of the shack below you.
Now go into your equipment and equip both Throwing Daggers (or similar) and Fire Pots (or the Explosive Clumps you found earlier). By this point in the game you should have the materials for plenty of Fire Pots, so craft some now if you don’t have at least 5-6. Then use your Throwing Daggers (or similar projectile that isn’t explosive) to aggro the two knights — one’s patrolling and one’s got his back to you guarding a tunnel.
Our goal here is to now use a Fire Pot or similar explosive to blow up the barrels at the base of the ladder — while the knights are standing near them. If you’re lucky, they’ll both cluster around the barrels as they try to climb the ladder, but as long as you can throw a firepot at one of the knights while they’re standing next to the barrels, that’ll work — the whole point of this is to not have to fight two knights at once.
The ideal outcome
Don’t be afraid if they start climbing the ladder, as they’ll just climb back down when they get to the top. Feel free to stay up here and use the rest of your firepots to weaken/kill the remaining enemies (don’t forget about the regular soldier enemy down there). Once all these enemies are dispatched, go into the shack to the south and kill the two dogs there, then grab the Troll’s Hammer.
Go down the shack’s stairs and go around to the right side of the shack, where you’ll find a Smithing Stone . Now go to the left side of the shack and continue to behind the shack, where a Somber Smithing Stone  waits for you. Head back to the front of the shack and turn right to find another miner — across from him in the wall is one more Smithing Stone for ya. Look west and note the tunnel just to the right of the ladder — that’s the path to the boss, who we’ll go smash soon.
The path to the boss
For now though, go into the right-hand shack to find a Somber Smithing Stone . Next, go around the back of the shack, where you’ll find another tunnel to the northwest. Continue that direction and you’ll enter a small chamber, where a dog hides behind some boxes on the right and a miner sits on the left. Take ’em both down and grab the x2 Smithing Stone  and the Somber Smithing Stone  in the walls.
You can now head to the hallway noted earlier that leads to the boss room, where you’ll face a familiar foe, a Stonedigger Troll.